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Friday

Nov082013

What Is Bitcoin, Anyway?

Friday, November 8, 2013 at 09:31AM

If you're like me, you see Bitcoin mentioned all over your RSS feeds and social media, but have only the foggiest notion of what it is. . .

The Wikipedia:

Bitcoin is a distributed, peer-to-peer digital currency that functions without the intermediation of any central authority. The concept was introduced in a 2008 paper by a pseudonymous developer known as "Satoshi Nakamoto".

Bitcoin has been called a cryptocurrency because it is decentralized and uses cryptography to control transactions and prevent double-spending, a problem for digital currencies. Once validated, every individual transaction is permanently recorded in a public ledger known as the blockchain. Payment processing is done by a network of private computers often specially tailored to this task. The operators of these computers, known as "miners", are rewarded with transaction fees and newly minted bitcoins. However, new bitcoins are created at an ever-decreasing rate. Once 21 million are distributed, issuance will cease. As of August 2013, approximately 11.5 million bitcoins were in circulation.

Aaron Sankin in The Daily Dot writes a primer on Bitcoin --

Everything you wanted to know about Bitcoin (but were too afraid to ask)

By Aaron Sankin on November 07, 2013

On Oct. 31, 2013, the most viewed topic on Wikipedia outside of Halloween wasn’t about the Boston Red Sox or Eminen’s highly anticipated new album. It was Bitcoin, the digital cryptocurrency that’s been gaining favor around the world. On that day alone, the article was viewed over 14,000 times. (Note: there is no such thing as a physical Bitcoin)

Clearly there’s an intense and growing demand for basic information about Bitcoin—especially considering it hit a record high of $270 this week.

Here’s what you need to know.